Blue Owl Technology Finance Corp

OTF

Market cap $5.82B

Select BDCs are deeply oversold, offering high-quality opportunities with attractive yields and significant discounts, without requiring aggressive risk-taking. Current sector-wide discounts are rare and present compelling entry points, as much of the recent selloff is driven by irrelevant factors. Deeper value BDCs in the lowest valuation quartile carry higher risk but also greater upside, demanding careful, small-position sizing.

Loans on watchlists, showing stress but still paying, have risen since late 2024.

Blue Owl Technology Finance's portfolio is heavily exposed to software borrowers financed using annualized recurring revenue, a lending strategy now facing skepticism as artificial intelligence reshapes the industry.

Two high-quality, high-yields have seen their valuations compressed despite maintaining strong underlying fundamentals. Both are generating per-share growth in addition to offering huge yields that appear sustainable for the foreseeable future. The SpaceX IPO and continued strong fundamentals could be major catalysts for TRIN and OTF.

We take a look at the action in business development companies through the last week of February and highlight some of the key themes we are watching. BDCs fell sharply on Friday, likely as a result of a bankruptcy of a UK mortgage provider. Q4 earnings are largely fine in aggregate, if not spectacular.

Double-digit yields look irresistible… but there are hidden risks few income investors truly understand. Business Development Company dividends are about to change – here's what everyone is missing.

Blue Owl Technology Finance Corp. (OTF) Q4 2025 Earnings Call Transcript

Blue Owl Technology Finance Corp. trades at a steep 67% of NAV, with market fears of tech credit risk seen as overstated. OTF's portfolio is highly diversified, 76.8% first lien, with non-accruals at just 0.2% of fair value and low 0.75x leverage. Management is executing aggressive buybacks, supported by $2.3B liquidity and a new $300MM repurchase program to capitalize on the NAV discount.

Blue Owl Technology Finance Corp. trades at a steep 0.67x P/NAV, well below sector norms, despite robust fundamentals. OTF's portfolio quality is exceptional, with non-accruals at 0.2% versus the sector's 3.6% and a conservative net LTV of 34%.

A $1 trillion wipeout just rocked software stocks. However, the real opportunity may be hiding in plain sight. While everyone debates AI disruption, a deeply undervalued, high-quality, well-covered 11%+ yielding opportunity to profit from the SaaS carnage has just emerged.